There will be a difference, but it depends on how you view the pictures as to wether or not you will notice. If you print them, you may see it, on screen it may not be obvious. The best thing I can tell you is experiment. Thats why I love having a DLSR, because you can try all you want and it only costs you the price of a battery charge.

Set the camera to each of the setting you want to try and take a few pictures to see for yourself. If you are planning on printing them, go ahead and print off a few also.

I always have mine set to the largest setting, my way of looking at it is, I can always make the picture smaller later, but I can't make it bigger.

Check your instruction manual for the file sizes. The large-fine setting is, I believe, the setting that producesthe largestfile size of 3072x2052 or thereabouts. At 300 Pixel per Inch you can produce a photo quality picture at 6x10 (3072/300 x 2052x300)

The next size down, or large-normal will produce a smaller file to allow for more pictures on the card, but you pay by only being able to print up to a certain size and maintain a photo quality output. What you need to do, as already mentioned, is to take some shots at the lower quality setting and try making prints at the largest size you think you might ever want to print and see if the quality is what you want. If you never make prints above 5x7 this may not be a problem for you. If you sometimes do 8x10 or larger printsyou may need to think about whether you really want to use the lower quality settings.

I never use the smaller sizes because I always want to have the ability to print a large sized print if I so choose from any file. However,I also have 2.5 gigabytes worth of flash cards so I'm normally not faced with a storage problem.

Not to sound like a digi-snob, I recommend and use only RAW files. Yes, it uses more space on your CF card, but RAW assures the best possible image quality. Even at the highest quality setting, JPEG compression is throwing away information--data that you can never get back.

Using RAW you have somewhat greater exposure range making high contrast scenes more likely to be successful. You do not need to buy a fancy RAW image processor to use RAW. It takes only a few minutes for the Canon File Viewer Utility (included with your camera) to convert to TIFF files (either 8 or 16-bit)--andTIFFsalso retain all image information. Even if you are just shooting some snapshots, what if you get lucky and shoot the picture of a lifetime? Wouldn't you want the best quality to sell to Time magazine? Or to send that 11x14 to your daughter's grandmother?

If you still insist on shooting JPEGs, be sure to save as PSD or TIF the first time you open them in PS or PSE. Every time you save as a JPEG, you lose a little more information. Open - edit - save - close a JPEG once a day for two weeks, and you've just about destroyed the picture. I say again: EVERY time you save a JPEG, you lose more information that you can never get back.